But he added it was “well placed to navigate the external environment” and “focused on delivering our strategy”.

The full-year dividend paid to shareholders has been reduced by 15.7% to 10.2p a share.

These are the first results to include figures from the Argos and Habitat brands, which were bought for £1.4bn last year.

Once their sales are added in, overall group sales increased 12.7%

Merging the operations has produced cost savings of £130m and a profit contribution from Argos of £77m.

Mr Coupe said: “We have opened 59 Argos Digital stores in Sainsbury’s supermarkets and they are performing well. We are therefore accelerating our plan to open a total of 250 Argos Digital stores in Sainsbury’s supermarkets.”